BR BR Administrators CBB Reporting Module
BR-A BR-A Introduction
BR-A.1 BR-A.1 Purpose
Executive Summary
BR-A.1.1
This Module sets out requirements applicable to
administrators licensees regarding reporting to the Central Bank of Bahrain ('CBB'). These include the provision of financial information to the CBB, as well as notification to the CBB of certain specified events, some of which require prior CBB approval. This Module also outlines the methods used by the CBB in gathering information required in the supervision ofadministrators licensees .May 2011Legal Basis
BR-A.1.2
This Module contains the Central Bank of Bahrain ('CBB') Directive (as amended from time to time) regarding CBB Reporting requirements applicable to
administrators licensees , and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law').May 2011BR-A.1.3
For an explanation of the CBB's rule-making powers and different regulatory instruments, see section UG-1.1.
May 2011BR-A.2 BR-A.2 Module History
Evolution of Module
BR-A.2.1
This Module was first issued in May 2011. All subsequent changes to this Module are annotated with the end-calendar quarter date in which the change was made: UG-3 provides further details on Rulebook maintenance and version control.
May 2011BR-A.2.2
A list of recent changes made to this Module is provided below:
Module Ref. Change Date Description of Changes BR-3.1.1A and BR-3.1.1B 04/2012 Added Paragraphs to clarify Rules on power to request information. BR-3.3.1 and BR-3.4 04/2012 Minor corrections. BR-3.5 04/2012 New Section added to include material transferred from common Chapters EN-2 and AA-5 BR-1.1.9 and BR-2.2.18 10/2012 Updated reference to CBB Rulebook Volume 7 (CIU). BR-1.1.13 01/2013 Clarified deadline to update IIS. BR-1.1.15 and BR-1.1.16 04/2013 Added new Paragraphs to include reporting requirements on controllers and close links as per Rules contained under Module GR. BR-3.5.14 07/2013 Amended numbering of referred appendix. BR-1.1.1A 10/2019 Added a new Paragraph on disclosure of financial penalties. BR-2.3.10 01/2020 Amended Paragraph. BR-2.3.11 01/2020 Amended Paragraph. BR-2.3.14 01/2023 Deleted Paragraph on CBB approval for outsourcing of functions. BR-B BR-B Scope of Application
BR-B.1 BR-B.1 Scope of Application
BR-B.1.1
The content of this Module applies to all
administrators licensees authorised in the Kingdom of Bahrain, thereafter referred to in this Module aslicensees .May 2011BR-1 BR-1 Reporting Requirements
BR-1.1 BR-1.1 General Requirements
Audited Financial Statements
BR-1.1.1
As specified in Article 62 of the CBB Law, a
licensee must submit to the CBB its final audited financial statements within 3 months of thelicensee's financial year-endMay 2011BR-1.1.1A
In accordance with Paragraphs EN-B.4.5 and EN-5.2.2,
licensees must disclose in their annual audited financial statements the amount of any financial penalties paid to the CBB, together with a factual description of the reason(s) given by the CBB for the penalty.Licensees which fail to comply with this requirement will be required to make the disclosure in the annual audited financial statements of the subsequent year and will be subject to an enforcement action for non-disclosure.Added: October 2019Suspicious Transaction Reports (STR)
BR-1.1.2
As per Rule FC-5.2.4,
licensees must report all suspicious transactions or attempted transactions to the Financial Intelligence Unit at the Ministry of Interior and to the Compliance Directorate at the CBB.May 2011BR-1.1.3
As per Rule FC-1.8.2
licensees must make a suspicious transaction report to the Compliance Directorate at the CBB and the Financial Intelligence Unit at the Ministry of Interior, if they are approached by a shell bank or an institution they suspect of being a shell bank.May 2011BR-1.1.4
As per Rule FC-5.2.3, if
licensees suspect that a person has been engaged in money laundering or terrorism financing, or the activity concerned is regarded as suspicious, thelicensee must report the fact promptly to the Financial Intelligence Unit at the Ministry of Interior and copy the Compliance Directorate at the CBB. The reports must be made using the STR Form and related instructions, included in Part B of Volume 5.May 2011BR-1.1.5
As per Section FC-8.1, when dealing with entities or persons domiciled in countries or territories which are identified by the FATF as being non-cooperative or notified to
licensees from time to time by the CBB, whenever thelicensee has suspicions about the transaction, these must be reported to the Financial Intelligence Unit at the Ministry of Interior and the Compliance Directorate at the CBB.May 2011BR-1.1.6
As per Rule FC-8.3.3,
licensees must report to the Financial Intelligence Unit at the Ministry of Interior and the Compliance Directorate at the CBB, using the procedures contained in Section FC-5.2, details of any accounts or other dealings with persons and entities designated by the CBB as potentially linked to terrorist activity.May 2011Reports Prepared by the MLRO
BR-1.1.7
As per Rule FC-4.3.1(a) and (b),
licensees must arrange for their MLRO to produce a report containing the number of internal reports made in accordance with Section FC-5.1, a breakdown of all the results of those internal reports and their outcomes for each segment of thelicensee's business, and an analysis of whether controls or training need to be enhanced and a report, indicating the number of external reports made in accordance with Section FC-5.2 and, where alicensee has made an internal report but not made an external report, noting why no external report was made. These reports are to be submitted to the CBB by the 30th of April of the following year.May 2011Report of Fraud or Attempted Fraud
BR-1.1.8
Licensees must report any actual or attempted fraud incident (however small) to the appropriate authorities (including the CBB) (ref. FC-11.1).May 2011Reports Required as per Volume 7 (CIU)
BR-1.1.9
Licensees must comply with any reporting requirements applicable to them as stipulated in CBB Rulebook Volume 7 (CIU).Amended: October 2012
May 2011Reports Prepared by the External Auditor
BR-1.1.10
As per Rule FC-4.3.1(d),
licensees must arrange for their external auditor to produce a report as to the quality of thelicensee's anti-money laundering procedures, systems and controls, and compliance with the AML Law and Module FC (Financial Crime) to be submitted to the CBB by the 30th of April of the following year.May 2011Terrorist Financing
BR-1.1.11
As per Rule FC-8.2.4,
licensees must report to the Compliance Directorate at the CBB, details of:(a) Funds or other financial assets or economic resources they have with them which may be the subject of Article 1, paragraphs (c) and (d) of UNSCR 1373; and(b) All claims, whether actual or contingent, which thelicensee has on persons and entities which may be the subject of Article 1, paragraphs (c) and (d) of UNSCR 1373.May 2011Annual License Fee
BR-1.1.12
Licensees must complete and submit Form ALF (Annual License Fee) to the CBB, no later than 30 April each year, together with the payment due under Rule AU-5.2.1.May 2011Institutional Information System (IIS)
BR-1.1.13
Licensees are required to complete online non-financial information related to their institution by accessing the CBB's institutional information system (IIS).Licensees must update the required information at least on a quarterly basis or when a significant change occurs in the non-financial information included in the IIS. If no information has changed during the quarter, thelicensee must still access the IIS quarterly and confirm the information contained in the IIS.Licensees must ensure that they access the IIS within 20 calendar days from the end of the related quarter and either confirm or update the information contained in the IIS.Amended: January 2013
May 2011BR-1.1.14
Licensees failing to comply with the requirements of Paragraph BR-1.1.13 or reporting inaccurate information are subject to financial penalties or other enforcement actions as outlined in Module (EN) EnforcementMay 2011Report on Controllers
BR-1.1.15
In accordance with Paragraph GR-5.1.8,
licensees must submit, within 3 months of their financial year-end, a report on theircontrollers which must identify allcontrollers of thelicensee , as defined under Section GR-5.2.Added: April 2013Report on Close Links
BR-1.1.16
In accordance with Paragraph GR-6.1.3,
licensees must submit within 3 months of their financial year-end, a report on theirclose links which must identify all undertakings closely linked to thelicensee , as defined under Section GR-6.2.Added: April 2013BR-2 BR-2 Notifications and Approvals
BR-2.1 BR-2.1 Introduction
BR-2.1.1
All notifications and approvals required in this Chapter are to be submitted by
licensees in writing.May 2011BR-2.1.2
In this Module, the term 'in writing' includes electronic communication capable of being reproduced in paper form.
May 2011BR-2.1.3
A
licensee must make the notifications and approvals required in Chapter BR-2 immediately it becomes aware, or has information which reasonably suggests, that any of the matters in Chapter BR-2 have occurred, may have occurred or may occur in the near future.May 2011BR-2.1.4
Licensees are required to provide the CBB with a range of information to enable it to monitor thelicensee's compliance with Volume 5 of the CBB Rulebook. Some of this information is provided through regular reports, whereas others are in response to the occurrence of a particular event (such as a change in name or address). The following sections list the commonly occurring reports for which alicensee will be required to notify the CBB or seek its approval.May 2011BR-2.2 BR-2.2 Notification Requirements
Matters Having a Serious Supervisory Impact
BR-2.2.1
A
licensee must notify the CBB if any of the following has occurred, may have occurred or may occur in the near future:(a) Thelicensee failing to satisfy one or more of the Principles of Business referred to in Module PB;(b) Any matter which could have a significant adverse impact on thelicensee's reputation;(c) Any matter which could affect thelicensee's ability to continue to provide adequate services to itscustomers and which could result in serious detriment to acustomer of thelicensee ;(d) Any matter in respect of thelicensee that could result in material financial consequences to the financial system or to otherlicensees ;(e) Any breach of any provision of the Rulebook (including a Principle);(f) A breach of any requirement imposed by the relevant law or by regulations or an order made under any relevant law by the CBB; or(g) If alicensee becomes aware, or has information that reasonably suggests that it has or may have provided the CBB with information that was or may have been false, misleading, incomplete or inaccurate, or has or may have changed in a material way, it must notify the CBB immediately (ref. BR-3.3.2).May 2011BR-2.2.2
The circumstances that may give rise to any of the events in Paragraph BR-2.2.1 are wide-ranging and the probability of any matter resulting in such an outcome, and the severity of the outcome, may be difficult to determine. However, the CBB expects
licensees to consider properly all potential consequences of events.May 2011BR-2.2.3
In determining whether an event that may occur in the near future should be notified to the CBB, a
licensee should consider both the probability of the event happening and the severity of the outcome should it happen. Matters having a supervisory impact could also include matters relating to aparent undertaking orcontroller that may indirectly have an effect on thelicensee .May 2011Legal, Professional, Administrative or other Proceedings Against a Fund Administration Licensee
BR-2.2.4
A
licensee must notify the CBB immediately of any legal, professional or administrative or other proceedings instituted against thelicensee ,controller or aclose link including aparent undertaking of thelicensee that is known to thelicensee and is significant in relation to thelicensee's financial resources or its reputation.May 2011BR-2.2.5
A
licensee must notify the CBB of the bringing of a prosecution for, or conviction of, any offence under any relevant law against thelicensee that would prevent thelicensee from meeting the Principles of Business (Module PB) or any of itsDirectors , officers orapproved persons from meeting the fit and proper requirements of Module AU.May 2011Fraud, Errors and other Irregularities
BR-2.2.6
A
licensee must notify the CBB immediately if one of the following events arises and the event is significant:(a) It becomes aware that an employee may have committed a fraud against one of itscustomers ;(b) It becomes aware that a person, whether or not employed by it, is acting with intent to commit fraud against it;(c) It identifies irregularities in its accounting or other records, whether or not there is evidence of fraud;(d) It suspects that one of its employees may be guilty of serious misconduct concerning his honesty or integrity and which is connected with thelicensee's regulated or ancillary activities; or(e) Any conflicts of interest.May 2011Insolvency, Bankruptcy and Winding Up
BR-2.2.7
Except in instances where the CBB has initiated the following actions, a
licensee must notify the CBB immediately of any of the following events:(a) The calling of a meeting to consider a resolution for winding up thelicensee , acontroller orclose link , including aparent undertaking of thelicensee ;(b) An application to dissolve acontroller orclose link , including aparent undertaking of thelicensee or to strike thelicensee off the Register of Fund Administrators;(c) The presentation of a petition for the winding up of acontroller orclose link , including aparent undertaking of thelicensee ;(d) The making of any proposals, or the making of, a composition or arrangement with any one or more of thelicensee's creditors, for material amounts of debt;(e) An application for the appointment of an administrator or trustee in bankruptcy to acontroller orclose link , including aparent undertaking of thelicensee ;(f) The appointment of a receiver to acontroller orclose link , including aparent undertaking of thelicensee (whether an administrative receiver or a receiver appointed over particular property); or(g) An application for an interim order against thelicensee , acontroller orclose link , including aparent undertaking of thelicensee under the Bankruptcy and Composition Law of 1987 or similar legislation in another jurisdiction.May 2011Other Supervisors
BR-2.2.8
A
licensee must notify the CBB immediately if it becomes subject to or ceases to be subject to the supervision of any overseas supervisor (including ahome supervisor ).May 2011BR-2.2.9
The supervisory regime and any legislative or foreign provisions to which that
licensee , is subject, influence the CBB's approach to the supervision of thelicensee .May 2011External Auditor
BR-2.2.10
A
licensee must notify the CBB of the following:(a) Removal or resignation of auditor (ref. AA-1.2.1); or(b) Change in audit partner (ref. AA-1.3.3).May 2011Approved Persons
BR-2.2.11
A
licensee must notify the CBB of the termination of employment ofapproved persons , including particulars of reasons for the termination and arrangements with regard to replacement (ref. AU-4.3.5).May 2011BR-2.2.12
Licensees must immediately notify the CBB when they become aware of any of the events listed in Paragraph EN-8.2.3, affecting one of theirapproved persons .May 2011Capital Adequacy
BR-2.2.13
In the event that a
licensee fails to meet any of the requirements specified in Module CA (Capital Adequacy), it must, on becoming aware that it has breached the requirements, immediately notify the CBB in writing (ref. CA-1.1.5).May 2011BR-2.2.14
As specified in Article 58 of the CBB Law, a
licensee must notify the CBB immediately of any matter that may affect its financial position, currently or in the future, or limit its ability to meet its obligations.May 2011Outsourcing Arrangements
BR-2.2.15
Licensees must immediately inform their direct supervisory contact at the CBB of any material problems encountered with an outsourcing provider.May 2011Controllers
BR-2.2.16
If, as a result of circumstances outside the
licensee's knowledge and/or control, one of the changes to theircontrollers specified in Paragraph GR-5.1.1 is triggered prior to CBB approval being sought or obtained, thelicensee must notify the CBB as soon as it becomes aware of the fact and no later than 15 calendar days after the change occurs (ref. GR-5.1.4).May 2011BR-2.2.17
As specified in Article 52 of the CBB Law, a
licensee must notify the CBB of the following events:(a) If effective control over alicensee takes place indirectly whether by way of inheritance or otherwise.(b) Gaining control directly as a result of any action leading to it; or(c) The intention to take any of the actions that would lead to control.May 2011Other Notification Requirements
BR-2.2.18
Licensees must comply with any notification requirements applicable to them as stipulated in CBB Rulebook Volume 7 (CIU).
Amended: October 2012
May 2011BR-2.3 BR-2.3 Approval Requirements
Change in Name
BR-2.3.1
In accordance with Paragraph GR-2.1.1, a
licensee must seek prior written approval from the CBB and give reasonable advance notice of a change in:(a) Thelicensee's name (which is the registered name if thelicensee is a body corporate); or(b) Thelicensee's trade name.May 2011BR-2.3.2
The request under Paragraph BR-2.3.1 must include the details of the proposed new name and the date on which the
licensee intends to implement the change of name.May 2011Change of Address
BR-2.3.3
As specified in Article 51 of the CBB Law, a
licensee must seek approval from the CBB and give reasonable advance notice of a change in the address of thelicensee's principal place of business in Bahrain.May 2011BR-2.3.4
The request under Paragraph BR-2.3.3 must include the details of the proposed new address and the date on which the
licensee intends to implement the change of address.May 2011BR-2.3.5
As specified in Article 51 of the CBB Law, a
licensee must seek approval from the CBB for its intention to carry on its business from new premises in Bahrain. This requirement applies whether or not the premises are to be used for the purposes of transacting business withcustomers , administration of the business or as the head office in Bahrain of thelicensee .May 2011Change in Legal Status
BR-2.3.6
A
licensee must seek CBB approval and give reasonable advance notice of a change in its legal status that may, in any way, affect its relationship with or limit its liability to itscustomers .May 2011Change in Authorised or Paid-up Capital
BR-2.3.7
As specified in Article 57(3) of the CBB Law, a
licensee must seek CBB approval before making any modification to its authorised or paid-up capital. In the case that alicensee has been granted approval to increase its paid-up capital, confirmation from the external auditor stating that the amount has been deposited in thelicensee's bank account will subsequently be required.May 2011Controllers and Close Links
BR-2.3.8
In accordance with Section GR-5.1,
licensees must seek CBB approval and give reasonable advance notice of any of the following events concerning thelicensee :(a) A person acquiring control or ceasing to have control;(b) An existingcontroller acquiring an additional type of control (such as ownership or significant influence) or ceasing to have a type of control;(c) An existingcontroller increasing the percentage ofshares or voting power beyond 10%, 20% or 50%; and(d) An existingcontroller becoming or ceasing to be aparent undertaking .May 2011BR-2.3.9
Every
licensee authorised in Bahrain is required to submit an annual report on itscontrollers , as per Paragraph GR-5.1.8, andclose links as set out in Paragraph GR-6.1.3.May 2011Carrying out Business in Another Jurisdiction
BR-2.3.10
A
licensee must seek CBB approval and give three months' notice of its intention to undertake fund administration activities in a jurisdiction other than Bahrain, prior to commencing that business and where the effect of commencing that business may have a significant impact on:(a) Thelicensee's business in Bahrain; or(b) The capital resources of thelicensee .Amended: January 2020
Added: May 2011Mergers, Acquisitions, Disposals and Establishment of New Subsidiaries
BR-2.3.11
A
licensee incorporated in Bahrain must seek CBB approval and give reasonable advance notice of its intention to enter into a:(a) Merger with another undertaking; or(b) Proposed acquisition, disposal or establishment of a newsubsidiary undertaking .Amended: January 2020
Added: May 2011BR-2.3.12
Licensees will also need to consider the implications of a merger, acquisition, disposal or establishment of a newsubsidiary undertaking in the context of thecontrollers andclose links rules set out in Module GR.May 2011Share Option Schemes
BR-2.3.13
A
licensee must seek prior approval from the CBB for any share option schemes it proposes to offer to its employees.May 2011Outsourcing Arrangements
BR-2.3.14
[This Paragraph was deleted in January 2023].
Deleted: January 2023
May 2011Matters Having a Serious Supervisory Impact
BR-2.3.15
A
licensee must seek prior approval from the CBB for any material changes or proposed changes to the information provided to the CBB in support of an authorisation application that occurs after authorisation has been granted.May 2011BR-2.3.16
Any
licensee that wishes, intends or has been requested to do anything that might contravene, in its reasonable opinion, the provisions of UNSCR 1373 (and in particular Article 1, Paragraphs c) and d) of UNSCR 1373) must seek, in writing, the prior written opinion of the CBB on the matter (ref. FC-7.2.2).May 2011BR-2.3.17
As specified in Article 57 of the CBB Law, a
licensee wishing to modify its Memorandum or Articles of Association, must obtain prior written approval from the CBB.May 2011BR-2.3.18
In accordance with Paragraph GR-4.1.1, a
licensee must seek prior written approval from the CBB before transferring any of its business to a third party.May 2011Dividends
BR-2.3.19
Licensees , must obtain a letter of no-objection from the CBB to any dividend proposed, before submitting a proposal for a distribution of profits to ashareholder vote (ref. GR-3.1.1).May 2011External Auditor
BR-2.3.20
A
licensee must seek prior approval from the CBB for the appointment or re-appointment of its external auditor (ref. AU-2.7.1 and AA-1.1.1).May 2011Approved Persons
BR-2.3.21
A
licensee must seek prior approval from the CBB for the appointment of persons undertaking acontrolled function in alicensee (ref. Article 65 of the CBB Law, AU-1.2 and AU-4.2.1).May 2011BR-2.3.22
Licensees must seek prior CBB approval before anapproved person may move from onecontrolled function to another within the samelicensee (ref. AU-4.2.11).May 2011BR-2.3.23
If a
controlled function falls vacant, thelicensee must appoint a permanent replacement (after obtaining CBB approval), within 120 calendar days of the vacancy occurring. Alicensee making immediate interim arrangements for thecontrolled function affected, must obtain approval from the CBB for such arrangement (ref. AU-4.3.5).May 2011BR-3 BR-3 Information Gathering by the CBB
BR-3.1 BR-3.1 Power to Request Information
BR-3.1.1
Licensees must provide all information that the CBB may reasonably request in order to discharge its regulatory obligations.May 2011BR-3.1.1A
Licensees must provide all relevant information and assistance to the CBB inspectors andappointed experts on demand as required by Articles 111 and 114 of the CBB Law. Failure bylicensees to cooperate fully with the CBB's inspectors orappointed experts , or to respond to their examination reports within the time limits specified, will be treated as demonstrating a material lack of cooperation with the CBB which will result in other enforcement measures being considered, as described elsewhere in Module EN. This rule is supported by Article 114(a) of the CBB Law.Added: April 2012BR-3.1.1B
Article 163 of the CBB Law provides for criminal sanctions where false or misleading statements are made to the CBB or any person/
appointed expert appointed by the CBB to conduct an inspection or investigation on the business of thelicensee or the listed licensee.Added: April 2012Information Requested on Behalf of other Supervisors
BR-3.1.2
The CBB may ask a
licensee to provide it with information at the request of or on behalf of other supervisors to enable them to discharge their functions properly. Those supervisors may include overseas supervisors or government agencies in Bahrain. The CBB may also, without notifying alicensee , pass on to those supervisors or agencies information that it already has in its possession.May 2011BR-3.2 BR-3.2 Access to Premises
BR-3.2.1
A
licensee must permit representatives of the CBB, or persons appointed for the purpose by the CBB to have access, with or without notice, during reasonable business hours to any of its business premises in relation to the discharge of the CBB's functions under the relevant law.May 2011BR-3.2.2
A
licensee must take reasonable steps to ensure that each of its providers under material outsourcing arrangements deals in an open and cooperative way with the CBB in the discharge of its functions in relation to thelicensee .May 2011BR-3.2.3
The cooperation that
licensees are expected to procure from such providers is similar to that expected oflicensees themselves.May 2011BR-3.3 BR-3.3 Accuracy of Information
BR-3.3.1
Licensees must take reasonable steps to ensure that all information they give to the CBB is:(a) Factually accurate or, in the case of estimates and judgements, fairly and properly based after appropriate enquiries have been made by thelicensee ; and(b) Complete, in that it should include everything which the CBB would reasonably and ordinarily expect to have.Amended: April 2012
May 2011BR-3.3.2
If a
licensee becomes aware, or has information that reasonably suggests that it has or may have provided the CBB with information that was or may have been false, misleading, incomplete or inaccurate, or has or may have changed in a material way, it must notify the CBB immediately. The notification must include:(a) Details of the information which is or may be false, misleading, incomplete or inaccurate, or has or may have changed;(b) An explanation why such information was or may have been provided; and(c) The correct information.May 2011BR-3.3.3
If the information in Paragraph BR-3.3.2 cannot be submitted with the notification (because it is not immediately available), it must instead be submitted as soon as possible afterwards.
May 2011BR-3.4 BR-3.4 Methods of Information Gathering
BR-3.4.1
The CBB uses various methods of information gathering on its own initiative which require the cooperation of
licensees :(a) Representatives of the CBB may make onsite visits at the premises of thelicensee . These visits may be made on a regular basis, or on a sample basis, for special purposes such as theme visits (looking at a particular issue across a range oflicensees ), or when the CBB has a particular reason for visiting alicensee ;(b) Appointees of the CBB may also make onsite visits at the premises of thelicensee . Appointees of the CBB may include persons who are not CBB staff, but who have been appointed to undertake particular monitoring activities for the CBB, such as in the case ofAppointed Experts (refer to Section BR-3.5).(c) The CBB may request thelicensee to attend meetings at the CBB's premises or elsewhere;(d) The CBB may seek information or request documents by telephone, at meetings or in writing, including electronic communication; and(e) The CBB may requirelicensees to submit various documents or notifications, as per Chapter BR-2, in the ordinary course of their business such as financial reports or on the happening of a particular event in relation to thelicensee such as a change in control.Amended: April 2012
May 2011BR-3.4.2
When seeking meetings with a
licensee or access to the licensee's premises, the CBB or the CBB appointee needs to have access to alicensee's documents and personnel. Such requests will be made during reasonable business hours and with proper notice. There may be instances where the CBB may seek access to the licensee's premises without prior notice. While such visits are not common, the prospect of unannounced visits is intended to encouragelicensees to comply at all times with the requirements and standards imposed by the CBB as per legislation and Volume 4 of the CBB Rulebook.Amended: April 2012
May 2011BR-3.4.3
The CBB considers that a
licensee should:(a) Make itself readily available for meetings with representatives or appointees of the CBB;(b) Give representatives or appointees of the CBB reasonable access to any records, files, tapes or computer systems, which are within thelicensee's possession or control, and provide any facilities which the representatives or appointees may reasonably request;(c) Produce to representatives or appointees of the CBB specified documents, files, tapes, computer data or other material in thelicensee's possession or control as may be reasonably requested;(d) Print information in thelicensee's possession or control which is held on computer or otherwise convert it into a readily legible document or any other record which the CBB may reasonably request;(e) Permit representatives or appointees of the CBB to copy documents of other material on the premises of thelicensee at thelicensee's expense and to remove copies and hold them elsewhere, or provide any copies, as may be reasonably requested; and(f) Answer truthfully, fully and promptly all questions which representatives or appointees of the CBB reasonably put to it.Amended: April 2012
May 2011BR-3.4.4
The CBB considers that a
licensee should take reasonable steps to ensure that the following persons act in the manner set out in Paragraph BR-3.4.3:(a) Its employees; and(b) Any other members of its group and their employees.Amended: April 2012
May 2011BR-3.4.5
In gathering information to fulfill its supervisory duties, the CBB acts in a professional manner and with due regard to maintaining confidential information obtained during the course of its information gathering activities.
May 2011BR-3.5 BR-3.5 The Role of the Appointed Expert
Introduction
BR-3.5.1
The content of this Chapter is applicable to all
licensees andappointed experts .Added: April 2012BR-3.5.2
The purpose of the contents of this Chapter is to set out the roles and responsibilities of
appointed experts when appointed pursuant to Article 114 or 121 of the CBB Law (see EN-2.1.1). These Articles empower the CBB to assign some of its officials or others to inspect or conduct investigations oflicensees .Added: April 2012BR-3.5.3
The CBB uses its own inspectors to undertake on-site examinations of
licensees as an integral part of its regular supervisory efforts. In addition, the CBB may commission reports on matters relating to the business oflicensees in order to help it assess their compliance with CBB requirements. Inspections may be carried out either by the CBB's own officials, by duly qualifiedappointed experts appointed for the purpose by the CBB, or a combination of the two.Added: April 2012BR-3.5.4
The CBB will not, as a matter of general policy, publicise the appointment of an
appointed expert , although it reserves the right to do so where this would help achieve its supervisory objectives. Both theappointed expert and the CBB are bound to confidentiality provisions restricting the disclosure of confidential information with regards to any such information obtained in the course of the investigation.Added: April 2012BR-3.5.5
Unless the CBB otherwise permits,
appointed experts should not be the same firm appointed as external auditor of thelicensee .Added: April 2012BR-3.5.6
Appointed experts will be appointed in writing, through an appointment letter, by the CBB. In each case, the CBB will decide on the range, scope and frequency of work to be carried out byappointed experts .Added: April 2012BR-3.5.7
All proposals to appoint
appointed experts require approval by an Executive Director or more senior official of the CBB. The appointment will be made in writing, and made directly with theappointed experts concerned. A separate letter is sent to thelicensee , notifying them of the appointment. At the CBB's discretion, atrilateral meeting may be held at any point, involving the CBB and representatives of thelicensee and theappointed experts , to discuss any aspect of the investigation.Added: April 2012BR-3.5.8
Following the completion of the investigation, the CBB will normally provide feedback on the findings of the investigation to the
licensee .Added: April 2012BR-3.5.9
Appointed experts will report directly to and be responsible to the CBB in this context and will specify in their report any limitations placed on them in completing their work (for example due to thelicensee's group structure). The report produced by theappointed experts is the property of the CBB (but is usually shared by the CBB with the firm concerned).Added: April 2012BR-3.5.10
Compliance by
appointed experts with the contents of this Chapter will not, of itself, constitute a breach of any other duty owed by them to a particularlicensee (i.e. create aconflict of interest ).Added: April 2012BR-3.5.11
The CBB may appoint one or more of its officials to work on the
appointed experts' team for a particularlicensee .Added: April 2012The Required Report
BR-3.5.12
The scope of the required report will be determined and detailed by the CBB in the appointment letter. Commissioned
appointed experts would normally be required to report on one or more of the following aspects of alicensee's business:(a) Accounting and other records;(b) Internal control systems;(c) Returns of information provided to the CBB;(d) Operations of certain departments; and/or(e) Other matters specified by the CBB.Added: April 2012BR-3.5.13
Appointed experts will be required to form an opinion on whether, during the period examined, thelicensee is in compliance with the relevant provisions of the CBB Law and the CBB's relevant requirements, as well as other requirements of Bahrain Law and, where relevant, industry best practice locally and/or internationally.Added: April 2012BR-3.5.14
The
appointed experts report should follow the format set out in Appendix BR-10, in part B of the CBB Rulebook.Amended: July 2013
Added: April 2012BR-3.5.15
Unless otherwise directed by the CBB or unless the circumstances described in Section BR-3.5.19 apply, the report must be discussed with the Board of directors and/or
senior management in advance of it being sent to the CBB.Added: April 2012BR-3.5.16
Where the report is
qualified by exception , the report must clearly set out the risks which thelicensee runs by not correcting the weakness, with an indication of the severity of the weakness should it not be corrected.Appointed experts will be expected to report on the type, nature and extent of any weaknesses found during their work, as well as the implications of a failure to address and resolve such weaknesses.Added: April 2012BR-3.5.17
If the
appointed experts conclude, after discussing the matter with thelicensee , that they will give a negative opinion (as opposed to onequalified by exception ) or that the issue of the report will be delayed, they must immediately inform the CBB in writing giving an explanation in this regard.Added: April 2012BR-3.5.18
The report must be completed, dated and submitted, together with any comments by directors or management (including any proposed timeframe within which the
licensee has committed to resolving any issues highlighted by the report), to the CBB within the timeframe applicable.Added: April 2012Other Notifications to the CBB
BR-3.5.19
Appointed experts must communicate to the CBB, during the conduct of their duties, any reasonable belief or concern they may have that any of the requirements of the CBB, including the criteria for licensing alicensee (see Module AU), are not or have not been fulfilled, or that there has been a material loss or there exists a significant risk of material loss in the concernedlicensee , or that the interests of customers are at risk because of adverse changes in the financial position or in the management or other resources of alicensee . Notwithstanding the above, it is primarily thelicensee's responsibility to report such matters to the CBB.Added: April 2012BR-3.5.20
The CBB recognises that
appointed experts cannot be expected to be aware of all circumstances which, had they known of them, would have led them to make a communication to the CBB as outlined above. It is only whenappointed experts , in carrying out their duties, become aware of such a circumstance that they should make detailed inquiries with the above specific duty in mind.Added: April 2012BR-3.5.21
If
appointed experts decide to communicate directly with the CBB in the circumstances set out in Paragraph BR-3.5.19, they may wish to consider whether the matter should be reported at an appropriate senior level in thelicensee at the same time and whether an appropriate senior representative of thelicensee should be invited to attend the meeting with the CBB.Added: April 2012Permitted Disclosure by the CBB
BR-3.5.22
Information which is confidential and has been obtained under, or for the purposes of, this chapter or the CBB Law may only be disclosed by the CBB in the circumstances permitted under the Law. This will allow the CBB to disclose information to
appointed experts to fulfil their duties. It should be noted, however, thatappointed experts must keep this information confidential and not divulge it to a third party except with the CBB's permission and/or unless required by Bahrain Law.Added: April 2012Trilateral Meeting
BR-3.5.23
The CBB may, at its discretion, call for a
trilateral meeting (s) to be held between the CBB and representatives of the relevantlicensee and theappointed experts . This meeting will provide an opportunity to discuss theappointed experts' examination of, and report on, thelicensee .Added: April 2012